Well.. your'e right the SC didn't "rule". It was worse than that... they didn't even listen. It wasn't even close enough in thier minds to get a hearing in the court. They rejected the cities claim without even listening. That's worse than losing in court.
The case was never presented to the SCOTUS. Don't blame the SCOTUS, you have to blame the city. Unless the case was presented to them, the SCOTUS will not hear it. They accept cases on writ of certiorai and if no one files a writ, then the SCOTUS doesn't hear the case.
Never mind. :-)